Renesas eyes foreign CEO, nominations welcome

NEW YORK Ė Thereís nothing surprising about Japan Inc. going out of its way to bail out Renesas Electronics. The obvious objective is to maintain a steady flow of Renesas chips into domestic products, especially Toyota and Nissan automobiles.

Surprising, however, are rumors that the new owners of Renesas are looking for a foreign executive to head up the company.

Under the deal announced Monday (Dec. 10), the Innovation Network Corp. of Japan (INCJ), a public-private partnership, will pay 138 billion yen ($1,675 million) to acquire a 69 percent stake in Renesas. Eight major Renesas customers, including Toyota, Nissan, Canon and Panasonic, will pay almost 12 billion yen ($146 million) for a 6 percent stake.

That means the chip maker's former majority shareholders Ė NEC, Hitachi and Mitsubishi Ė will see their share drop from 90 to 23 percent. The trio joined forces to form Renesas by combining their loss-making chip operations, but are showing no interest in a majority stake in Renesas. The three companies agreed to accept some laid-off Renesas employees, and to provide loans for restructuring. But itís clear. They arenít committed to doing anything beyond that.

(Source: Nikkei.com)

Why a foreign CEO?

Nikkei, Japanís economic journal, quoted an unnamed senior INCJ official, as saying it is looking for "a foreign executive, well-versed in the semiconductor industry to serve as the new CEO of Renesas." INCJ is also seeking a leader "with a shining track record in managing a global semiconductor maker who can reinvent the firm."

Foreign will be for sure detrimental. Need a person with deep technical and market aware. Also great knowledge of each company's product and strength. Would a local person with open mind be available? Somebody with no or less Japanese old culture. Somebody with much exposure to Western "faster and not afraid decision making" thinking. Was Sony's Pres had Berkeley educ.

Junko,
I will take a completely different stand here. Foreign CEO at Renesas is not going to happen. Government didn't allow KKR to take over the company, so there is no reason to even think that they will bring in a foreigner CEO. In addition, the government backed fund is very much aware of the risk of having a foreigner CEO. Olympus is the latest example. The British CEO completely exposed the toxic management and unethical business practices of Olympus. Considering that Renesas was not a public entity for so many years, only god knows what exactly is there in the pandora box. Government will simply not take the risk.
Now coming to your theory of scapegoat, the most suitable candidate is Mr. Akao, the current president of Renesas. He will now be used to do the dirty work and he will be done away with when no longer required.
Government has no business to be in business. When that happens, there would be a disaster in making. If owners of Renesas and government were really serious about turning around Renesas, they would have allowed KKR to come in. Atleast, KKR would have brought the right set of people and taken the required steps. Concerns of auto companies getting affected were merely a face wash. The government backed fund has no expertise of running a silicon company in today's competitive scenario, nor do they have a strong urge to turn around the company.
Last time I predicted that they will not allow KKR deal to go through. My prediction came right. This time I am predicting that foreigner CEO is not happening. I hope I go wrong this time, but inside myself, I know that I will be right this time as well!

I'm thinking Donald Trump. Honestly, a lot of sacred cows will need to go... Unfortunately, changing the company in the way it likely needs to be changed will require a top down demolition and rebuilding. Just my opinion...